Legally Speaking - Legal Recruiter Blog

Jones Day announced yesterday that 15 Heller Ehrman partners would be joining its offices in San Francisco, New York and Washington.  The firm has also hired some Heller associates, but did not disclose the number other than to say that the firm would likely end up with the same number of associates as partners.

Humor columnist The Snark lists the top five ways to know your Big Firm is feeling the effects of the economic crisis:

1. People start doing strange things—such as taking vacations or long weekends

2. The holiday party gets downsized

3. Basic services and perks start to evaporate

4. Billable hours dry up

5. Partners start doing their own work

Read the complete story here.

It shouldn’t be a surprise to anyone that law firms plan on hiring fewer associates next year.

In Washington D.C., twenty two of the thirty largest law firms plan on bringing on fewer associates in 2008 than they did in 2007. Some will decrease hiring by only two or three attorneys, while others will cut hiring by as much as thirty percent. Collectively the firms that provided figures for a recent survey say that their associate hires will drop by five percent.

As the economy has faltered, workload has decreased, especially transactional work. With many lawyers afraid to risk a job change in a fluctuating job market, attrition is down. Firms are will be cautious in their hiring practices until the nature of the economic downturn becomes clear.

Lateral movement does remain strong, however, at the partner level. There is as much, if not more, demand at the partner level. Whenever news breaks that a particular firm may be having difficulties, recruiters start receiving calls from firms interested in recruiting partners who may be looking to escape a sinking ship.

Heller Ehrman management had hoped that other firms would pick up large groups of lawyers and office leases from the defunct firm.  These deals have fallen through.

Peter Benvenutti, chairman of the dissolution committee now controlling Heller Ehrman, confirmed rumors that Baker & McKenzie and Winston & Strawn had withdrawn proposals to pick up large groups of lawyers and the real estate they inhabit.  While the large deals have fallen through, Baker is apparently still looking at taking on five to twenty Heller partners in a variety of practice areas and locations and Winston is also apparently still after some Heller attorneys.

Heller employees have also been told not to expect to be paid for accrued vacation time, leading to bankruptcy rumors.  This could happen if at least three creditors who are owed more than $13,475 file an involuntary bankruptcy petition.  Given that the creditors include landlords, vendors and employees in addition to banks, this may not be far off, even though bankruptcy would make it more difficult for some of those creditors to collect.

Whether this is a fragment of ancient wisdom or merely a line from the 1959 movie “Operation Petticoat” I have never been able to establish, but it was never truer than now.

Eleven major firms have established practice groups focusing on the economic crisis.  Richmond, Va.-based LeClairRyan, Boston-based Foley Hoag, Tampa, Fla.-based Carlton Fields and Akron, Ohio-based Roetzel & Andress, Washington-based Patton Boggs, Houston-based Bracewell & Giuliani and several other firms have announced practice groups with names including “crisis,” “restructuring” and “recovery” focusing on the opportunities presented by the credit crunch.

Like the rest of us, clients are struggling to figure out what the $700 billion Emergency Economic Stabilization Act means to them.

In the continuing saga of Heller Ehrman…

From Cal Law:

“In a partner conference call on Thursday, firm management said they expected to hear whether former merger candidates Winston & Strawn, Baker & McKenzie and Mayer Brown would be interested in picking up large chunks of Heller’s offices, practice groups or both. Management told the partners that they expected to hear back from the firms over “the next few days.””

Read more here

Heller Ehrman may soon be no more.

The latest round of merger talks with Mayer Brown ended Monday.  A Mayer Brown statement cited client and practice conflicts which could not be resolved.

Partners were told Wednesday that dissolution was one of the options for the firm and management understood that partners would begin talking to other firms. Not surprisingly, several individuals and groups have already begun talks, sources said.

Whether options other than dissolution remain on the table is not clear.  The consensus among industry watchers is that there are really no other viable alternatives.  A firm spokesman said, “We continue to consider our strategic options.”

According to one source, Baker & McKenzie, with whom merger talks fell apart in August, is trying to gobble up large pieces of Heller Ehrman.

Most corporate law firms rely on financial institutions as the bedrock clients on which they are built.  Lehman Brothers’ bankruptcy and the acquisition of Merrill Lynch by Bank of America have sent a wave of anxiety through New York’s top law firms.  This news, along with the earlier demise of Bear Stearns and probable imminent collapse of insurance giant American International Group, does not bode well for law firms who rely heavily on financial clients.

Unlike corporate clients, financial clients have usually been willing to pay full rate or premium fees to the firms they employ.  This is why New York law firms are so profitable.  Firms from other cities and even outside the U.S. have sunk a lot of money into New York offices in an effort to get a piece of the Wall Street pie.

Corporate firms fear forced consolidation and new government regulation will lead to a cost-cutting mentality on Wall Street.

The acquisition of Merrill Lynch by Bank of America spells trouble for firms like Shearman & Sterling and Skadden, Arps, Slate, Meagher & Flom who have relied heavily on Merrill Lynch.  What their roles, if any, will be after the takeover is unknown.

Cadwalader, Wickersham & Taft, which has already laid off 100 lawyers this year, did big business representing Lehman in its offerings of mortgage-backed securities, which proved to be the bank’s Achilles heel.  Lehman’s demise may be the nail in the coffin of Cadwalader’s core securitization practice.

Yale Law Women has taken its latest look at law firms’ policies. Releasing its third annual survey on family-friendly firms, the student group cites the 10 best at helping lawyers strike a work-life balance. Some results were heartening. The group found, for example, that the firms are giving men an average of eight weeks of paternity leave. Other figures were more daunting, such as the finding that, even in the most family-friendly firms, women make up only 19 percent of partners.

Read the Article Here

From the Law Librarian Blog:

Bankruptcy filings in federal courts rose by 28.9 percent according to statistics released by the Administrative Office of the U.S. Courts. There were 967,831 bankruptcy cases filed during the 12-month period that ended June 30, 2008, compared to 751,056 cases the previous 12 months.   Historic data on bankruptcy filings is available on the Judiciary’s website under Bankruptcy Statistics.